Introduction.
As discussed in our previous paper on “Asset Tracing as a Means of debt recovery in Corporate Insolvency Litigation” here, “asset tracing” is the process of identifying assets through investigations for a particular purpose [without going into the details to answer questions as to who has a legal right to the assets so traced]. It can be distinguished from asset recovery which involves the restraining, seizure, confiscating, and return of the assets traced to the rightful owner; it is an assertion of a right.
Asset tracing can be relevant in the context of unclaimed financial assets and in particular, the process of identifying and recovering unclaimed financial assets. It is also relevant in identifying abandoned assets owned by a judgment debtor for the purpose of execution.
Unclaimed financial assets.
In Kenya, the Unclaimed Financial Assets Act, No. 40 of 2011 is the Act of Parliament that provides for the reporting and dealing with unclaimed financial assets; to establish the Unclaimed Financial Assets Authority [hereinafter “the Authority”] and the Unclaimed Financial Assets Trust Fund. The Act defines “unclaimed assets” to mean assets that: –
- have been presumed abandoned and have become unclaimed assets under the provisions of this Act.
- have been transferred to the Unclaimed Financial Assets Authority [UFAA] as unclaimed assets under the Act, or
- have been deemed under any other law to be unclaimed assets and payable to the Authority.
Under Sections 22 and 23 of the Act, where abandoned assets are paid or delivered to the Authority, the Authority takes custody of the assets and is responsible for the safekeeping of the assets. If the abandoned assets are not claimed within the statutory period, the Authority shall sell such assets to the highest bidder at a public auction.
Claim on Unclaimed Assets under Section 28 of the UFAA.
A person claiming an interest in any assets paid or delivered to the Authority under the UFAA may file with the Authority the prescribed form together with supporting documents set out under Regulation 11 of the Unclaimed Financial Assets Regulations, 2016.
The Authority shall then consider such a claim within ninety days after it is filed and shall give written notice to the claimant of its decision. Where a claim is allowed, the Authority shall pay over or deliver to the claimant the assets or the amount the Authority received or the net proceeds if it has been sold by the Authority.
Attachment of assets owned by a Judgment Debtor held by the Unclaimed Financial Assets Authority.
While the Act is silent on whether one can attach assets owned by an apparent owner and in the custody of the Authority, Order 22 Rule 40 of the Civil Procedure Rules, provides that in the case of movable property not in the possession of the judgment-debtor, attachment of the same may be done by a written order prohibiting the person in possession of the same from giving it over to the judgment-debtor.
The provision further provides that if the person in possession of the movable property does not object to the said attachment by filing objector proceedings, the court may make an order for the actual seizure of the property as if it were in the possession of the judgment-debtor.